HA!  I got it. spent part of the night reading last night.
Problem #1:  The disk needs to be RAW.  No formatting.  Found that on one of the early XDA threads.
Problem #2:  The biggest issue, if you have an account set as admin in XP, this does not mean that the programs running are running as admin. MAJOR hurdle.  
I got the nook to boot.  IT did not reboot itself.  I had to power back on (low battery maybe??)  
IT ran through the android screen, then began throwing force close errors.  I used 7.0.3 That I found in an XDA writeup.  
I came back to load the build from this thread, and to load gapps.  XP WILL NOT recognize the partitions.  Do I need to partition using wintool and then load Gapps to that partition??
I have boot, EXT4, EXT4 and CM7 FAT partitions now.  I can build a new card but not sure it will work.   
Thanks for not cutting me down on all of this.  I don;t like to admit to my novice computing skills, but this has rubbed my face in it a bit.
Stopped Apps
Com.android.providers.calender
.deskclock
.bluetooth
com.koushikdutta.rommanager
.media
.media is repeatedly showing an error.
nook looks f'in awesome though.